European stocks recover as the global market sell-off pauses

The European market has been boosted by a recovery in the USA, where all major indexes closed higher on Tuesday evening.

Global stock market sell-off appears to have paused.

LONDON — European stock markets have bounced back on Wednesday, as the global sell-off in equity markets takes a breather following heavy losses.

Overnight, the Dow Jones Industrial Average in the USA, gained more than 2%, having previously seen its biggest single day points sell-off in history on Monday.

After opening down 568 points, the Dow surged more than 1,000 points intraday. The index of 30 large stocks including Apple and Goldman Sachs finished up 567 points, or 2.3%.

That recovery spread to some parts of Asia, with Japan's Nikkei and Australia's ASX gaining ground on the day. Other Asian bourses, including the Shanghai Composite in mainland China and the Hang Sen in Hong Kong, nursed losses, down 1.82% and 1.09% respectively.

Markets appear to have stabilised in Europe, however, with all of the continent's leading bourses in the green during the first half of the trading on Wednesday.

Wednesday's European recovery comes, according to Mike van Dulken, head of research at Accendo Markets, amid "lingering indecision about whether what we've seen this week is a long overdue technical correction, or the opening sequence for a greater unwind."

"An unwind from a protracted period of historically low volatility, yields, borrowing costs and investor concern, which contributed to high levels of market valuation, passive investing, financial engineering and complacency," he wrote in an email.

The market's huge sell-off may have paused, but it remains unclear as to whether Tuesday and Wednesday's recovery marks the end of the sell-off, or if things are set to resume later in the week. Investors should get a clearer picture of what is likely to happen later on Wednesday, when US markets reopen at 2pm UK time.